Raj Rajaratnam, Galleon Group fund manager and co-founder, is arrested by U.S. marshals at his office in Manhattan in October 2009 for alledged violations of fraud and insider trading laws (Click Image To Enlarge)

Chiesi, who did a 15-month stint at a West Virginia prison camp for passing illegal stock tips to hedge-fund manager Raj Rajaratnam, returned in January to New York City and has been living at a federal halfway house in the north Bronx.

A svelte Chiesi, wearing a white sleeveless peplum top, jeans and pink and white scarf, said May 16 as she left a residence she shares with other newly freed prisoners. (Click Image To Enlarge)

She said of her new found freedom from federal prison on being found guilty f fraud and insider trading laws.

“It’s good to be back. I feel good. I feel great.”

The halfway house in the Bronx New York where Danielle Chiesi will spend six months in a community-based 're-entry' program before being placed on two-year probation. (Click Image To Enlarge)

Chiesi, giving her first post-prison interview, is one of more than 70 stock traders, analysts, lawyers and executives who have been convicted of insider trading since August 2009.The former teenage beauty queen, who once showed up at technology conferences wearing form-fitting clothes and low-cut tops, is among the most flamboyant defendants to be ensnared in the sweeping federal crackdown.

Two years ago Raj Rajaratnam, co-founder of the Galleon Group LLC, a NY hedge fund firm, received the longest-sentence ever handed down for violating insider trading laws. (Click Image To Enlarge)

The probe initially centered on Rajaratnam, the Galleon Group LLC co-founder who was convicted in 2011 of conspiracy after an eight-week trial.The Sri Lankan-born money manager, who allegedly earned at least $45 million on tips from corporate insiders, is serving an 11-year prison sentence.

At Rajaratnam’s trial, prosecutors played wiretapped recordings of his conversations with Chiesi, who worked as an analyst at New Castle Funds LLC in New York. In one, they speculated why another trader bought 1 million shares of Advanced Micro Devices Inc. (AMD) before the public disclosure of a transaction between Sunnyvale, California-based AMD and Abu Dhabi’s Mubadala Development Co. Prosecutors said they had a tip.

Chiesi said on the recording.

“That’s a very bold move to make. Do you think somebody knows what we know?”

Robert Moffat, a former senior executive of IBM whose phone conversations were recorded by the FBI in the Galleon hedge fund insider trading probe, pleaded guilty to securities fraud and conspiracy charges in March 2010 (Click Image To Enlarge)

Chiesi pleaded guilty to conspiracy before the trial and went to prison in October 2011. In her guilty plea, she admitted that she solicited inside tips from technology industry executives. Among them was Robert Moffat, a former International Business Machines Corp. executive with whom she had an intimate relationship, he said in his guilty plea. Moffat got a six-month sentence.

Chiesi said in the May 16 interview.

“I was complicit.”

West Virginia

Chiesi did her time in Alderson, West Virginia, at a minimum-security camp in the foothills of the Allegheny Mountains. Martha Stewart was once jailed there for lying to authorities about her sale of stocks.

Aerial View of Alderson Federal Prison Camp in Wesst Virgnia, the same facility where Danielle Chiesi did her time and Martha Stewart served time for lying about insider trading. (Click Image To Enlarge)

Chiesi’s home was an 8-foot by 10-foot cubicle. Her cellmate was doing time for a drug offense, as were many at the prison. She spoke to family on brief phone calls and tutored other inmates in math. She went running and tried to exercise in a sparse gym that lacked weights.

Chiesi said she earned respect from fellow inmates because she hadn’t cooperated with prosecutors.

She said.

“Not being a rat works. I didn’t talk, I didn’t speak, I kept to myself."

Chiesi said of a term she described as “very difficult.” Her cellmate was “an inspiration” who “really helped me get through.”

Good Behavior

Chiesi left Alderson in early January after shaving time off her sentence for good behavior and participation in a drug and alcohol program. She headed for the community-based “re-entry” program in the Bronx, where she’ll spend six months before returning to an apartment in Manhattan.

Chiesi said.

“When my family picked me up, you cannot even believe the feeling. I had my mom, my brother, my sister, my nieces. They drove outside of the Alderson gates, and I jumped out of the car. It was surreal.”

She told her family.

“All I could say was, ‘I did it,’”

Now Chiesi is living on a tree-lined Bronx street that’s a far cry from the tony midtown Manhattan neighborhood that was once home. She has a room in a five-story facility housing men and women which is staffed by security officers guarding the entrance. Nearby are shuttered storefronts and a jeans shop selling $6 tank tops.

Chiesi, who is working for her brother in a job she declined to identify, comes and goes without an escort.

She said.

“Life is hard. I didn’t come back to something that’s perfect.”

‘Toxic’ Relationship

At her sentencing, Chiesi’s lawyers argued that her former boss, Mark Kurland, co-founder of New Castle Funds, had used their “toxic” sexual relationship to manipulate her into feeding him tips. In the May 16 interview, Chiesi asked about Kurland, who was sentenced to 27 months in the case.

Mark Kurland was Danielle Chiesi's boss at hedge fund firm Galleon Group. On May 2, 2009, he departs federal court in New York after being sentenced to 27 months in prison for fraud and insider trading. (Click Image To Enlarge)

She said.

“I want to know what Mark Kurland is doing now.”

Chiesi’s lawyer, Don Buchwald, said in an interview on May 16 that Chiesi must serve an additional two years on supervised release, a form of probation, after she leaves the halfway house.

Chiesi says she’s resilient and is eager to move on with her life.

She said.

“I don’t have a career anymore, but I have drive and ambition, and I will make it work. I’m back.”

The case is U.S. v. Rajaratnam, 09-cr-1184, U.S. District Court, Southern District of New York (Manhattan).

COMMENTARY: In a blog post dated May 15, 2011, I blogged about the trial of Danielle Chiesi for fraud and insider trading and how she cunningly manipulated numerous individuals into providing her information that she fed Galleon Group co-founder Raj Rajaratnam to help him make millions on securities trades.

Let's look at the key players in the insider trading trial of Galleon Group co-founder Raj Rajaratnam, and how much money he made from the securities trades.

Click Image To Enlarge

He stood trial in U.S. v Rajaratnam (09 Cr. 01184) in the United States District Court for the Southern District of New York, and on May 11, 2011 was found guilty on all 14 counts of conspiracy and securities fraud. On October 13, 2011, Rajaratnam was sentenced to 11 years in prison and fined a criminal and civil penalty of over $150 million combined.

Raj Rajaratnam was found guilty on all 14 charges against him for fraud and violatons of insider trading. (Click Image To Enlarge)

Rajaratnam is a very sick prisoner, suffering from Type II diabetes. Because of his medical condition, as of January 14, 2013 Rajaratnam is incarcerated at Federal Medical Center, Devens in Ayer, Massachusetts, an administrative facility housing male offenders requiring specialized or long-term medical or mental health care. Rajaratnam's release date is July 4, 2021.

The Danielle Chiesi case is absolutely incredible. It's difficult to believe that this bitch went to such lengths like sleeping with her victims to extract insider trader information to make a few bucks. The only other case I can compare it to is fictitious, from the blockbuster film "Wall Street" starring Charlie Sheen and Michael Douglas. In this film, Bud Fox, the a young stockbroker played by Sheen in the film, is hired by Gordon Gekko, a character very similar to Raj Rajaratnam, to get "information," by any means necessary. My only hope is that Hollywood makes a film from Ms Chiesi's exploits. I am looking forward to it, and will cover this bitch's exploits after she is finally given her freedom from justice.

Here's a short video clip of Danielle Chiesi and her attorney Alan Kaufman following her sentencing. Get a load of this bitch.

06/02/2014

Today, federal officialsannounced new charges against the GameOver Zeus botnet, together with coordinated seizures that appear to have stopped the network cold. GameOver Zeus infected as many as a million Windows computers, harvesting user credentials and executing fradulent wire transfers.

Today's federal complaint named Russia's Evgeniy Mikhailovich Bogachev as mastermind of the network, tracked down with the help of law enforcement agencies across eleven countries.

"Gameover Zeus is the most sophisticated botnet the FBI and our allies have ever attempted to disrupt. The efforts announced today are a direct result of the effective relationships we have with our partners in the private sector, international law enforcement, and within the US government."

GameOverZeus would use sophisticated attacks to harvest confidential information once computers were infected. Where a banking site might normally ask for a username and password, the malware could add extra fields for social security number and credit card information, inserted seamlessly into the page's layout. Once the attackers had enough data, they would strike with an unauthorized wire transfer. The federal complaint names four such attacks, ranging from $190,000 stolen from an assisted living facility, all the way up to $7 million stolen from a regional bank in northern Florida. According to the Justice Department, the total damage inflicted by GameOver totals more than $100 million.

The botnet also raised money through Cryptolocker an attack that would encrypt a computer's hard drive, demanding a ransom to unlock the data. For those that didn't pay, data-recovery costs reached as high as $80,000. Researchers say the botnet has been operational since October of 2011, but used a complex P2P mechanism to cover its tracks, making it difficult to track down before now. Strong encryption also disguised the location of the master servers. US assistant attorney general Leslie Caldwell said in a statement to the press.

"These schemes were highly sophisticated and immensely lucrative. The cyber criminals did not make them easy to reach or disrupt."

COMMENTARY:GameOver Zeus is an extremely sophisticated type of malware designed specifically to steal banking and other credentials from the computers it infects. It’s predominately spread through spam e-mail or phishing messages.

Unbeknownst to their rightful owners, the infected computers become part of a global network of compromised computers known as a botnet—a powerful online tool that cyber criminals can use for their own nefarious purposes. In the case of GameOver Zeus, its primary purpose is to capture banking credentials from infected computers, then use those credentials to initiate or re-direct wire transfers to accounts overseas that are controlled by the criminals. Losses attributable to GameOver Zeus are estimated to be more than $100 million.

Unlike earlier Zeus variants, GameOver has a decentralized, peer-to-peer command and control infrastructure rather than centralized points of origin, which means that instructions to the infected computers can come from any of the infected computers, making a takedown of the botnet more difficult. But not impossible.

Officials announced that in addition to the criminal charges in the case, the U.S. obtained civil and criminal court ordersin federal court in Pittsburgh authorizing measures to sever communications between the infected computers, re-directing these computers away from criminal servers to substitute servers under the government’s control.

The orders authorize the FBI to identity the IP addresses of the victim computers reaching out to the substitute servers and to provide that information to Computer Emergency Readiness Teams (CERTs) around the world, as well as to Internet service providers and other private sector parties who are able to assist victims in removing GameOver Zeus from their computers.

Important note: No contents of victim communications are captured or accessible in the disruption process.

In a related action announced today, U.S. and foreign law enforcement officials seized Cryptolockercommand and control servers. Cryptolocker is a type of ransomware that locks victims’ computer files and demands a fee in return for unlocking them. Computers infected with Cryptolocker are often also infected with GameOver Zeus.

Evgeniy Bogachev, added to the FBI’s Cyber’s Most Wanted list, was identified in court documents as the leader of a gang of cyber criminals based in Russia and the Ukraine responsible for the development and operation of both the GameOver Zeus and Cryptolocker schemes.

The actions to take down GameOver Zeus were truly collaborative. FBI Executive Assistant Director Robert Anderson said.

“GameOver Zeus is the most sophisticated botnet the FBI and our allies have ever attempted to disrupt. The efforts announced today are a direct result of the effective relationships we have with our partners in the private sector, international law enforcement, and within the U.S. government.”

03/31/2014

During the summer of 2011, Ukrainian President Viktor Yanukovych opened up his modest home to six television reporters, revealing what a journalist with the AP described as "a cozy place with a small office just big enough for his grandchildren to play in." Except even at the time, it was pretty obvious that he didn't live there. The same AP story went on to detail "strong evidence he actually lives in very different digs: a luxurious, marble-columned mansion with a golf course, a helipad, and even an ostrich enclosure."

Click Image To Enlarge

Click Image To Enlarge

Click Image To Enlarge

Yanukovych's critics were right. When the public finally got a glimpse of the leader's true housing situation after he fled Kiev a week and a half ago and found refuge in Russia (just before Ukraine's parliament voted him out of power) they found all of the above, plus a replica galleon floating on an artificial waterway, elaborate statuary on neatly manicured lawns, garages filled to the brim with vintage cars and motorcycles, bathrooms the size of studio apartments with gilded toilets, and more.

Click Image To Enlarge

Click Image To Enlarge

Click Image To Enlarge

The Ukrainian presidential palace has a dining room that is nothing short of overwhelming. The mansion wouldn't look out of place as the country abode of an oil baron or a Hollywood starlet, perhaps, but this is the private resident of a public official, who for most of his career made a salary in the realm of $2,000 a month. Yanukovych is currently missing (hiding out in Russia, thanks to that other crook Putin) and wanted on charges of mass murder related to the killing of Euromaidan protesters, who for the past three months have been protesting Yanukovych's policies, including rejecting an accord with the European Union in favor of strengthening ties with Putin's Russia. How Yanukovych's grand residence came to be is a baffling tale of corruption, secrecy, and questionable design choices. Now vacated and overrun by journalists and citizens hoping for a glimpse of the president's secrets, the palace remains an architectural tribute to the fantastic wealth and power wielded by its owner. And yeah, it's pretty ugly.

Click Image To Enlarge

Click Image To Enlarge

Click Image To Enlarge

Mezhyhirya, as the residence is called, was, up until 1923, the home of a monastery. In 1935, the 350-acre estate was taken over by the government and turned into a park with summer houses for Soviet officials. In 2007, Yanukovych privatized the property in his final days as Prime Minister, demolishing the Soviet-era buildings and erecting a five-story palace built by Honka, a Finnish company that specializes in log houses.

Click Image To Enlarge

In Yanukovych’s final weeks as Prime Minister, his government illegally privatised Mezhyhiriya. No money was paid to the state for its sale; instead, a couple of semi- derelict buildings in Kyiv were handed over in return (they have continued to fall down ever since).

Mezhyhiriya, meanwhile, was acquired, without any competitive tendering process, by a Donetsk company called ‘MedInvestTraid’, which immediately resold it and a few years later filed for bankruptcy.

Click Image To Enlarge

Click Image To Enlarge

Click Image To Enlarge

COMMENTARY: What is it with these Russian and Ukrainian presidents presidential palaces. Vladimir Putin's presidential palace is also very over the top and opulent. But former Ukrainian President Viktor Yanukovych went way over the top with his presidential palace. No wonder he was overthrown.

03/02/2014

Actor Stephen Dorff's TV commercial for e-cigaratte brand Blu, acquired by Lorillard for a reputed $135 million in 2012, is typical of the new "rebel-without the consequences" cigarette smoker theme being used in TV commercials by e-cigarettes manufacturers.

Addiction (and cred) without the consequences

On Saturday night at a pink-lit bar in New York's Lower East Side, the musician Aaron David Ross took a moment away from DJing his own party to evangelize a bit.

Between vaporous pulls of a dual-coil atomizer, Ross said.

"Look, I'm like the vegetarian that won't leave you alone. Cigarettes are terrible for you."

Ross, who makes records under the name ADR and is one-half of the industrial duo Gatekeeper, held up his personal vaporizer. Cylindrical and silver, it looked much more like an expensive piece of jewelry than a replacement for "analog" or traditional cigarettes, a stark contrast to the tobacco-aping NJOYs whose recent advertising campaign has focused on their ability to "look, taste, and feel just like a real cigarette."

Musician Aaron David Ross took a moment away from DJing his own party to portray himself as an e-cig 'vape' or 'vaporist' evangelist. (Click Image To Enlarge)

Ross and his friends, some wearing chains and black fitted caps, exhaled more odorless smoke than seemed reasonable for a human lung to hold. They looked pretty cool, which is a feat — a friend of Ross', Mat Dryhurst, had earlier relayed that when he started vaping,

"My wife said she wouldn't have sex with me if I did this in public."

Ross turned back to his laptop, where he was playing an FKA Twigs track to celebrate his new mixtape, Cloud Chasing Vol. 1. It's ostensibly the "first collection of music for vapers, by vapers," and it was compiled by Ross and some of his e-cig enthusiast friends in honor of a symposium held at the art and technology center Rhizome this past weekend. By inviting a group of artists, academics, and enthusiasts to speak on the subject of the e-cigarette, Rhizome hoped to learn "what it means to ‘vape.'"

They couldn't have scheduled the panels for a better time: as recently as a few years ago, e-cigarette smoking was a relatively obscure habit. But with the industry still largely unregulated and projected to rake in a reported $1.5 billion in sales this year, the e-cig market has grown into a multi-tentacled beast. Just as the largely forum-based DIY "modding" scene gains serious traction, legislation is on the horizon for 2014. Meanwhile Big Tobacco, thanks to new lines of electronic products, has the opportunity to hawk its wares on television for the first time in 40 years. This is the Wild West of the Electronic Nicotine Delivery Device (ENDD), and it may not last very much longer in its current form.

Click Image To Enlarge

And so the panel, on which Ross and Dryhurst both spoke, was cheekily called "This is the ENDD." The event largely cast the e-cig debate's usual suspects — economic, health, and legislative issues — as the background to a number of cultural shifts. Which, because of the world we live in, largely came down to the way e-cigarettes have been marketed.

The e-cigarette industry has spent vast amounts of money and time making a once-dorky and counterintuitive idea — sucking on a metal device filled with nicotine juice and some of the same chemicals used in smoke machines — look desirable, fun, and edgy. This year at CES, Vapor Corp. hosted a party on the pool deck of the Marquee with plexiglass jacuzzis; as one of Rhizome's panelists pointed out, NJOY invited "influencers" to party with e-cigs in hand at the posh Jane Hotel last year, before New York City's former mayor, Michael Bloomberg, banned public indoor vaping.

Health researcher and panelist CAB Fredericks notes Blu has even taken the recent indoor e-cig bans in select states as ammunition for those marketing campaigns, encouraging Blu customers to "fight back" against the man.

If some large e-cig companies like NJOY and Blu have rested their cred largely on the dont-tread-on-me, rebel-without-the-consequences feeling of retro Marlboro and Lucky Strike ads, others like the Reynolds-owned Vuse have churned out marketing materials that make their e-cigs sound less like smokes and more like iPads, with TV spots obliquely announcing "dreams, opportunities, the promise of new things to come."

Reynolds Vuse e-cigarette packaging reminds one of and Apple iPhone or iPad with its high-tech, sleek look. (Click Image To Enlarge)

According to Orit Gat, an art critic and Rhizome contributor, the schism between e-cigs marketed like gadgets and those marketed like cigarettes may be because "we're in a particular moment" in the development of the e-cigarette; "We're still not sure what they are," she said during her presentation, "or what we're supposed to do with them."

Gat, having recently spent time in Provence, France, flipped through slides of two smalle-clopinettes, small storefronts in which locals were encouraged to try the latest in e-cig technology. A sign above the display read, in French, "technology meets elegance." White-walled and minimalist, with battery packs and slim e-cigs displayed on a wall behind glass, the shops looked more like Apple Stores than smoke shops.

Her next set of slides, however, showed The Henley Vaporium in Nolita, where available e-cig flavors were written on a chalkboard pinned to an exposed brick wall. There, "vaporists" help you "hack" your e-cigs — "Whatever that means," Gat quipped — in a shop that shares more DNA with an artisinal coffee house than a hyper-clean technology store. She said.

"The closer we get to e-cigs, the closer it is to a Whole Foods than an Apple Store."

ltria Group, which is the parent company to Philip Morris USA, introduced its first electronic cigarette -- MarkTen -- in August 2013.(AP Photo - Altria Group Inc.) (Click Image To Enlarge)

For Dryhurst, the idea of the e-cig as a lifestyle brand originates a bit closer to home. When he switched from regular cigarettes to e-cigs, he says he realized he'd have to go all the way to fully commit — he had to make his new device part of his "look." Dryhurst, a San Francisco-based artist, says something like the corporate Blu just wouldn't cut it — He says.

"Blu cigarettes are the Coca-Cola of this culture. They went out of fashion."

Removable cartridges contain glycerol or propylene glycol, flavouring, and varying amounts of nicotine (including 0mg). The nicotine solution is vaporized by an atomizer which is activated by 'drawing' on the device or pressing a button. 'Smoking' an electronic cigarette (e-cigarette) mimics the act of smoking and is often referred to as 'vaping'.

Since their introduction into the market in 2004 by the Ruyan Group (later re-named Dragonite) in China, e-cigarettes have gained popularity worldwide. The e-cigarette market is rapidly growing and highly fragmented with over 100 different brands. Its estimated revenue at retail in the US in May 2012 was over $250 million and is expected to double by the end of 2012. Global e-cigarette revenues at the end of 2013 were estimated at $1.5 billion.

Product sophistication has also improved during this time, arguably augmenting nicotine delivery. 'Tank' systems have been introduced which contain a fluid-filled reservoir rather than a saturated foam (traditional non-tank cartridges). Users can mix their own 'liquid' choosing from a range of flavours and strengths to refill cartridges. Some e-cigarettes (e.g. the Super & Mini kits from TECC) are moving to 'cartomizers' in which the cartridge and atomizer are combined, allegedly resulting in a more efficient and tastier vape. Finally, since different voltages affect the vaping experience, variable voltage are a recent power control device that allow users to connect a range of atomizing devices and control the voltage that is applied to the atomizer.

10/13/2013

Twitter Inc.’s initial public offering documents suggested a valuation of $12.8 billion for the microblogging service, underscoring the seven-year rise of a still unprofitable company that has helped revolutionize how people share information.

In the most anticipated technology offering since Facebook Inc. (FB), San Francisco-based Twitter made public its S-1 prospectus yesterday and said it’s seeking to raise $1 billion. Twitter pegged the fair value of its common stock at $20.62 a share in August. There are 620 million shares outstanding, according to people familiar with its financials, who asked not to be named because the number was not included in the filing.

The prospectus removes the veil of secrecy that surrounded Twitter’s financials since the company said on Sept. 12 that it had filed confidentially for an IPO. It shows how the microblogging service, founded in 2006, has evolved from a simple site for 140-character updates to a booming online-advertising business that generated revenue of $253.6 million in the first six months of this year.

Brian Blau, a San Francisco-based technology analyst at Gartner Inc., said in an interview.

“Whether it’s worth $12 billion or not is really going to come down to how they can embrace this real-time news and information vision, how they can extend it to other revenue lines and how they can grow around the world.”

Click Image To View Video

Roadshow Soon

With Twitter taking the wraps off its S-1, the company will soon embark on a roadshow to promote the deal. The IPO will be a test for investors burned in recent years by the offerings of Internet companies such as Facebook, Groupon Inc. (GRPN) and Zynga Inc. (ZNGA), all of which plunged after their offerings. While Facebook shares have since climbed back, Groupon and Zynga are still trading below their IPO prices.

At $12.8 billion, Twitter would be valued at 28.6 times revenue over the past 12 months. Facebook debuted with price-to-sales ratio of about 26, while LinkedIn sold shares for 14.5 times revenue.

The offering will be pivotal for Chief Executive Officer Dick Costolo, who in 2010 became Twitter’s third CEO in as many years. He is credited with bringing management discipline, rapid hiring and a business plan to a company that was bogged down by a lack of focus and frequent technical outages.

Goldman Sachs Group Inc. (GS) was listed as the lead underwriter and was joined by Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp., Deutsche Bank AG, Allen & Co. and Code Advisors. The stock will list under the ticker TWTR.

Twitter’s revenue in the first six months of the year more than doubled to $253.6 million. The company said advertising revenue per timeline view in the second quarter rose 26 percent from the same period a year ago to 80 cents.

Twitter also disclosed that a majority of its revenue derives from mobile advertising, an area where rivals have struggled. In the three months that ended in June, more than 65 percent of Twitter’s ad revenue was generated from mobile devices. Facebook said in July that mobile accounted for 41 percent of revenue in the second quarter, up from 30 percent the prior period.

Twitter posted a net loss of $69.3 million in the first six months of 2013, compared with a net loss of $49.1 million in the same period a year ago. The company said that as of June 30, it had incurred an accumulated deficit of $418.6 million.

Clark Fredricksen, vice president at EMarketer Inc. in New York, said.

“They have clearly built their business from the get-go in the direction of where users are spending time, which is on their phones.”

The company included 32 pages of risk factors, compared with 22 pages in Facebook’s IPO filing last year. Among those are Twitter’s dependence on U.S. advertisers, even as more than three-quarter of its monthly active users are located outside the country. Twitter also cited stiff advertising competition, the company’s youth, and even earthquakes as risks.

One challenge lies in expanding the site’s user base. In June, Twitter had 218 million monthly users, up 44 percent from the year earlier. That was slower than its 78 percent growth the prior year.

Click Image To Enlarge

Twitter’s average revenue per user in the latest quarter was 64 cents based on its monthly active users and $139.3 million in sales. That’s less than half Facebook’s $1.60 average revenue per monthly user.

Click Image To Enlarge

War Chest

The IPO gives Twitter’s backers and early employees a chance to cash in shares, and will supply the company with a war chest to use on acquisitions and international expansion. The funds will also help the company forge stronger ties with advertisers and media businesses who want to reach Twitter’s growing audience.

Twitter said.

"We intend to use the IPO proceeds to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our stockholders.”

The company said it anticipates capital expenditures this year of $225 million to $275 million.

The S-1 also revealed Twitter is different from other Internet companies in its governance structure. Unlike the boards of Facebook, LinkedIn Corp. (LNKD) and Google Inc., which created multiple classes of stock to give extra voting power to their founders, Twitter has just one class.

Click Image To Enlarge

Charley Moore, founder of Rocket Lawyer Inc., a startup that provides legal service for customers, including Twitter employees, had this to say.

“Here you have a company that is probably going to be more democratic than some of those other businesses may be. They don’t have any special rights for their major shareholders.”

Twitter has rapidly expanded revenue since introducing advertising in 2010. The company now lets marketers pay to give their posts prominent placement on timelines, where people get updates from the accounts they follow. The company also lets advertisers pay to be placed next to a list of popular topics on Twitter in different geographies.

Costs have soared as Twitter invests in infrastructure and hiring, totaling $316.5 million in the first six months of this year, up 87 percent from the same period in 2012.

Gartner’s Blau said.

“They are building their company for the long term and they have to spend money to do that.”

Twitter has struck deals with video-content owners from the National Football League to Viacom Inc., seeking to get users spending more time on the site and watching more ads. It also bought Bluefin Labs, a Cambridge, Massachusetts-based startup that monitors social-media comments about TV shows, and partnered with Nielsen Holdings NV to measure the amount of online discussion being generated by TV programs.

COMMENTARY: This is one of the most boring digital IPO's I have seen in a long, long time. Twitter conjures comparisons with Zynga and Groupon. Lots of users and revenues, but no hint of a profit anywhere.

I had estimated that Twitter was losing money, but I didn't think they had racked up cumulative net opeating losses (NOLs) of $418 million since they launched in 2006. Having said this, it is not unusual for internet startups like social networks to incur significant NOL's. This was the case for Groupon, Zynga, LinkedIn, Angie's List, Yelp, and even Facebook.

History shows that fast growing digital technology startups must make significant investments in technology and personnel in order to provide users with a great user experience so that they keep coming back, and insure that they can access their personal pages without any hangups on a 24/7, 365-day basis.

Since nearly all social networks, depend on an ad-supported revenue model, without these investments in technology and personnel, social networks would never be able to reach a critical inflection point where the number of user and website traffic metrics attract big advertisers. The obvious question that investors will want to know is Twitter's strategy to grow revenues and generate a profit. Something worth nothing: Only Facebook and LinkedIn have been able to attain profitability after their IPO's. Twitter CEO Don Costolo certainly has his work cut out for him convincing investors during the upcoming roadshow.

The recent runup in Facebook's shares, which had lingered well below its IPO price of $38, and at one point hit a historic low of $19.05 at the end of August 2012, rallied in mid-May 2013 following impressive earnings reports for Q1 2013 and Q2 2013, driven by strong mobile ad revenues, no doubt influenced Twitter's decision to file for an IPO now. But, does an IPO even make sense? Let's take a good look at Twitter.

Who Uses Twitter?

The PEW Research Center's Internet & American Life Survey has updated their annual lookat who is using Twitter and other social media sites. In 2012, 15 percent of online adults were using Twitter, a small rise from 13 percent in 2011.

And in 2013? 16 percent of internet users are active on Twitter, and the service still skews favourably towards black and hispanic users, adults aged 18-29, and folks who live in urban areas.

Men are slightly more likely to use Twitter than women – two years ago the exact opposite was true – and almost one-third of Twitter users have at least some college experience. Relatively, Twitter remains unpopular with white users.

According to Adam Shlachter, senior vice-president of media at DigitasLBi,

"Twitter needs a larger user base and improved engagement to win business from mass-market clients, according to ad buyers. The company's monthly growth has slowed to 7% and it has less than one-fifth of the audience of rival Facebook. Twitter also needs to become a daily-use tool to assure advertisers access to a consistent audience to tap into ... not an audience that is just churning in and out."

As of last December 2012, Twitter said it had 215 million people actively using their service, with most of those accounts overseas, nowhere near the following of Facebook, with 1.15 billion active users, or Yahoo, with 800 million.

In the U.S., its audience is far smaller. According to Twitter's IPO filing, it had only 49 million active users at the end of the second quarter 2013, up from 48 million in the first quarter 2013, an increase of only 2.1%. By comparison, Twitter had 169 million international users at the end of the second quarter 2013, up from 156 million in the first quarter 2013, an increase of 8.3%. Facebook had 198 million monthly active users in the U.S, at the end of the second quarter 2013, but growth its U.S. growth has peaked, so it too depends on new international users in order to grow its user base.

Click Image To Enlarge

The reason for Twitter's slower user growth: Most people know what Twitter is, but many don't know how or why they should use it. Search for "I don't get Twitter" and Google spits out 5.7 billion results.

Now that it is on the verge of selling its stock to the public, Twitter has to prove to investors it can broaden its appeal or risk being pigeonholed as a niche service, analysts say.

"User base and growth have not been a problem to date, but Twitter is going to have to find a good system to reach tomorrow's Twitter users or eventually it will be a problem."

The Twitter IPO has captured the public imagination because Twitter has become such an integral part of popular culture.

It's a real-time spin room for politicians, an organizing tool for government protests, a wire service for breaking news and an online hangout to talk about live events and television shows.

Even its unusual conventions have saturated popular culture. Hashtags, a way of using a word to group tweets by subject, are on movie billboards and television ads. And "tweet" no longer just means the chirping of birds in the Oxford English Dictionary.

Twitter’s Popularity Among Teens

According to a new study from the financial firm Piper Jaffray, Facebook is losing teens in droves (denied by Facebook, naturally), Twitter is more popular among teens than Facebook, and has apparently overtaken Facebook as the most popular social network among U.S. teens.

The study found Twitter was preferred by 26 percent of adolescents while Facebook and its recently acquired unit Instagram were each chosen by 23 percent, down by 10% from a similar study in April 2013.

Twitter, Facebook, and Instagram are considerably more popular among teens than Tumblr and Google+, each of which can only claim less than 5 percent preference among trend-setting teens.

Teens spend a great deal of their time texting messages to their friends using their cell phones, and Twitter's 140-character tweets are a perfect fit, so it doesn't surprise me that teens are turning to Twitter for their favorite pastime. When you combine messaging with Twitter hashtags this is a marriage made in heaven. If Twitter can target more teens, they could dominate in this growing demographic, and this means more advertising dollars.

Twitter's Strategy To Increase Revenues and Generate Profits

So how exactly will Twitter increase revenues sufficiently in order to generate a profit?

In it's S-1 IPO filing, Twitter mentioned several areas to help increase revenues and profitability:

Integrate More Twitter Partner Content - Twitter signaled intentions to integrate more content via partnerships and acquisitions of technology "to enable our platform partners to distribute content of all forms."In recent weeks Twitter has been working on programs that help TV companies distribute video clips from their shows as the shows air live. Of course, the company released its short video app Vine earlier this year.

TV Ratings Products - On October 7, 2013, Nielsen introduced its Nielsen Twitter TV Ratings product to measure the reach of TV-related tweets, though interest from advertisers and networks remains to be seen. Measurements will note programming-related tweets and how many times they are seen by accounts. Brands must not forget "the overwhelming majority of conversations about TV shows still take place offline," said Ed Keller, CEO of the Keller Fay Group.

Self-Serve Ad Platform - Its plans for advertisers include improve targeting capabilities. But the company also says it will launch self-serve ad platforms in select international markets to expand its ad business into new territories. "Finally, we intend to develop new and unique ad formats for advertisers. For example, we recently introduced our lead generation and application download Twitter Cards and Twitter Amplify, which allows advertisers to embed ads into real-time video content.”

Monetize App Acquisitions - In 2013, Twitter acquired Vine, a mobile application that enables users to create and distribute videos that are up to six seconds in length, and #Music, a mobile application that helps users discover new music and artists based on Twitter data. Twitter is hoping that Vine increases user engagement and advertisers use it to create video ads that are short, yet unobstructive. This has already started to happen, but at a slower pace as advertisers experiment with the new app's value as an advertising tool. As more Twitter users begin using the #Music app, this should increase engagement between users sharing their favorite music with their followers.

A snap response from one ad industry veteran and Pivotal Research analyst Brian Wieser was“positive on the company and its business as a while, as it clearly has established itself as one of the world’s most important media properties, and one which is increasingly important to advertisers.” Wieser noted that the Twitter user base is still small compared to Yahoo, AOL and certainly Facebook. But he also notes that these rivals may be more subject to commoditization than Twitter. Key to the company profitability will be achieving scale and succeeding in an international expansion that is only starting, he says.

Twitter's average revenue per active user is $1.47 compared to Facebook's $4.10. Twitter now has an estimated 554 million registered users or about $0.63 average revenue per registered user. These figures are abysmal to say the least.

Twitter vs Facebook - Revenues, Net Income and Monthly Active Users at the time of IPO filing (Click Image To Enlarge)

With less than half of its users active (554 million registered vs 215 million active) compared to Facebook (presently 1.11 billion registered and 1.11 billion active users), Twitter must find a way to increase user engagement and site stickiness. This is going to be difficult to do with the growth in the number of monthly active users on the decline. Twitter's partnerships with the television networks may become the secret to increasing engagement and site stickiness. Increasing its share of the teen demographic is pivotal to increasing its base and increasing engagement.

Stand Your Ground gun laws allow individuals to legally use a gun in self-defense if they feel sufficiently threatened by another individual. Critics of these Stand Your Ground laws often call them "Shoot First, Explain Later" laws and for good reasons. In the Trayvon Martin case, the prosecution failed to prove its case, but all this case did was raise more questions concerning Stand Your Ground laws.

Is it lawful or even right for any person to pursue or follow another person simply because he believes the other person is suspicious looking and he believes that person is likely to commit a crime?

Wouldn't you feel threatened if you were being followed or pursued by a stranger? There was no evidence that Martin had committed a crime. Trayvon was not in possession of burlary tools or carrying stolen property. Trayvon Martin was unarmed. He was walking back home along the same path he always took when returning from the store.

Didn't Trayvon Martin have a right to stand his ground and question George Zimmerman as to the reason why he was being pursued?

Did George Zimmerman violate Trayvon Martin's civil rights by profiling him based on the color of his skin? In voice recording that Zimmerman made with the 911 operator, there is strong evidence to suggest that Zimmerman clearly believed that blacks are troublemakers because they wear "black hoodies," always come out "late at night" and always "get away" with crimes they commit. This was clearly a case of violating an individuals civil rights based on racial profiling.

Don't Stand Your Ground laws have the potential to create needless confrontations because the individual armed with a gun feels enpowered to contront someone else based on assumptions they make about that person that maybe entirely wrong? The result is almost a "wild west" mentality. What I am saying is simply this -- Why go looking for trouble, or create a needless confrontation, when you don't have to, especially when there are no substantial reasons or evidence to do so. Isn't it better and safer to leave this matter in the hands of the local police?

Comparison of justifiable homicides in states with "stand your ground" laws before and after the stand your ground laws were passed. Notice that more people were killed after the laws were passed. This is clear evidence that stand your ground laws empower gun owners to kill rather than avoid confrontations (Click Image To Enlarge)

The State of Florida vs George Zimmerman case clearly shows the difficulty of convicting an individual for murder in a Stand Your Ground case in the absence of witnesses. In fact, several jurors who voted George Zimmerman not guilty of murder, said that the Florida's Stand Your Ground laws needed changes to protect the victim as well. Trayvon Martin is the only person who knows what actually happened that night. Unfortunately, Trayvon Martin is dead. He is not around to provide his side of the story, and because of this, we will never truly know what happened that night over a year ago when an unarmed young man was simply walking home from the store.

Checkout this infographic created by the Huffington Post to determine if your state has Stand Your Ground laws in force.

07/17/2013

Since September 11th, 2001, the United States government has dramatically increased the ability of its intelligence agencies to collect and investigate information on both foreign subjects and US citizens. Some of these surveillance programs, including a secret program called PRISM, capture the private data of citizens who are not suspected of any connection to terrorism or any wrongdoing.

In June, a private contractor working for Booz Allen Hamilton leaked classified presentation slides that detailed the existence and the operations of PRISM: a mechanism that allows the government to collect user data from companies like Microsoft, Google, Apple, Yahoo, and others. While much of the program — and the rest of the NSA’s surveillance efforts — are still shrouded in secrecy, more details are coming to light as the public, as well as its advocates and representatives, pressure the government to come clean about domestic spying.

The What

What the hell is PRISM? PRISM is a tool used by the US National Security Agency (NSA) to collect private electronic data belonging to users of major internet services like Gmail, Facebook, Outlook, and others. It’s the latest evolution of the US government’s post-9/11 electronic surveillance efforts, which began under President Bush with the Patriot Act, and expanded to include the Foreign Intelligence Surveillance Act (FISA) enacted in 2006 and 2007.

There’s a lot we still don’t know about how PRISM works, but the basic idea is that it allows the NSA to request data on specific people from major technology companies like Google, Yahoo, Facebook, Microsoft, Apple, and others. The US government insists that it is only allowed to collect data when given permission by the secretive Foreign Intelligence Surveillance Court.

Why is PRISM a big deal?

Classified presentation slides detailing aspects of PRISM were leaked by a former NSA contractor. On June 6th, The Guardian and The Washington Post published reports based on the leaked slides, which state that the NSA has “direct access” to the servers of Google, Facebook, and others. In the days since the leak, the implicated companies have vehemently denied knowledge of and participation in PRISM, and have rejected allegations that the US government is able to directly tap into their users' data.

Both the companies and the government insist that data is only collected with court approval and for specific targets. As The Washington Post reported, PRISM is said to merely be a streamlined system — varying between companies — that allows them to expedite court-approved data collection requests. Because there are few technical details about how PRISM operates, and because of the fact that the FISA court operates in secret, critics are concerned about the extent of the program and whether it violates the constitutional rights of US citizens.

CRITICS HAVE QUESTIONED THE CONSTITUTIONAL VALIDITY OF PRISM

Click Image To Enlarge

How was PRISM created?

As The Washington Post reported, The Protect America Act of 2007 led to the creation of a secret NSA program called US-984XN — also known as PRISM. The program is said to be a streamlined version of the same surveillance practices that the US was conducting in the years following 9/11, under President George W. Bush’s “Terrorist Surveillance Program.”

The Protect America Act allows the attorney general and the director of national intelligence to explain in a classified document how the US will collect intelligence on foreigners overseas each year, but does not require specific targets or places to be named. As the Post reports, once the plan is approved by a federal judge in a secret order, the NSA can require companies like Google and Facebook to send data to the government, as long as the requests meet the classified plan's criteria.

Click Image To Enlarge

Who is responsible for leaking PRISM?

Edward Snowden, a 29-year-old intelligence contractor formerly employed by the NSA, CIA, and Booz Allen Hamilton, confessed responsibility for leaking the PRISM documents. He revealed himself on June 9th, three days after reports on PRISM were published; in an interview with The Guardian, Snowden said, “I don’t want to live in a society that does these sort of things,” and claimed he was motivated by civic duty to leak classified information.

Edward Snowden an NSA, CIA and Booz Allen Hamilton intelligence contractor leaked information about the NSA's PRISM surveillance system. Snowden fled the U.S. and is now in Moscow, Russia via Hong Kong waiting for a permanent safe haven (Click Image To Enlarge)

Snowden left the United States prior to leaking the documents in order to avoid capture, taking refuge in Hong Kong — where he stayed until June 23rd. With the assistance of WikiLeaks, Snowden fled Hong Kong for Moscow, and has requested asylum in Ecuador, Russia, and other countries. He is still residing in a Moscow airport, waiting to be granted asylum.

Surveillance systems like this one are located in cities throughout the U.S. (Click Image To Enlarge)

What does the NSA collect?

While PRISM has been the most talked-about story to come out of Snowden’s leaks, the disclosures have shed light on a vast array of NSA surveillance programs. Broadly speaking, these can be split into two categories: “upstream” wiretaps, which pull data directly from undersea telecommunications cables, and efforts like PRISM, which acquire communications from US service providers. One of the slides in the leaked PRISM presentation instructs that analysts “should use both” of these sources.

NSA programs collect two kinds of data: metadata and content. Metadata is the sensitive byproduct of communications, such as phone records that reveal the participants, times, and durations of calls; the communications collected by PRISM include the contents of emails, chats, VoIP calls, cloud-stored files, and more. US officials have tried to allay fears about the NSA’s indiscriminate metadata collection by pointing out that it doesn’t reveal the contents of conversations. But metadata can be just as revealing as content — internet metadata includes information such as email logs, geolocation data (IP addresses), and web search histories. Because of a decades-old law, metadata is also far less well-protected than content in the US.

NSA Programs Collect Two Kinds of Data: Metadata and Content

A leaked court order provided by Snowden showed that Verizon is handing over the calling records and telephony metadata of all its customers to the NSA on an “ongoing, daily basis.” Mass collection of internet metadata began under a Bush-era program called "Stellarwind," which was first revealed by NSA whistleblower William Binney. The program was continued for two years under the Obama administration, but has since been discontinued and replaced with a host of similar programs with names like “EvilOlive” and “ShellTrumpet.”

Click Image To Enlarge

How does the NSA collect data?

Many crucial details on how and under what circumstances the NSA collects data are still missing. Legally speaking, surveillance programs rely on two key statutes, Section 702 of the FISA Amendments Act (FAA) and Section 215 of the Patriot Act. The former authorizes the collection of communications content under PRISM and other programs, while the latter authorizes the collection of metadata from phone companies such as Verizon and AT&T. However, multiple reports and leaked documents indicate the statutes have been interpreted in secret by the FISA intelligence courts to grant much broader authority than they were originally written to allow. They also indicate that the FISA courts only approve the NSA’s collection procedures, and individual warrants for specific targets are not required.

An analyst starts by inputting “selectors” (search terms) into a system like PRISM, which then “tasks” information from other collection sites, known as SIGADs (Signals Intelligence Activity Designators). SIGADs have both classified and unclassified code names, and are tasked for different types of data — one called NUCLEON gathers the contents of phone conversations, while others like MARINA store internet metadata.

Leaked documents show that under the agency’s targeting and “minimization” rules, NSA analysts can not specifically target someone “reasonably believed” to be a US person communicating on US soil. According to The Washington Post, an analyst must have at least “51 percent” certainty their target is foreign. But even then, the NSA’s “contact chaining” practices — whereby an analyst collects records on a target’s contacts, and their contacts’ contacts — can easily cause Americans to be caught up in the process.

The rules state the analyst must take steps to remove data that is determined to be from “US persons,” but even if they are not relevant to terrorism or national security, these “inadvertently acquired” communications can still be retained and analyzed for up to five years — and even given to the FBI or CIA — under a broad set of circumstances. Those include communications that are "reasonably believed to contain evidence of a crime that has been, is being, or is about to be committed," or that contain information relevant to arms proliferation or cybersecurity. If communications are encrypted, they can be kept indefinitely.

NSA headquarters in Fort Meade, Maryland (Click Image To Enlarge)

So, what now?

In the weeks since the PRISM documents leaked, a widespread international public debate about the United States government’s surveillance and spying programs has engulfed the NSA, Congress, and the Obama administration in controversy. While outspoken supporters of NSA surveillance in Congress and the White House —including President Obama — have defended the legality and necessity of the programs, some US lawmakers are pushing back. In June, a bipartisan group of senators unveiled a bill that aims to rein in the problematic legal provisions that give US intelligence agencies nearly unfettered authority to conduct warrantless surveillance on domestic and foreign communications. Several other lawmakers have introduced their own measures, but legislative reform is still in early stages.

Meanwhile, a diverse coalition of interest groups and private organizations are directly challenging some of the NSA’s surveillance programs in court. On July 16th, a broad coalition of plaintiffs sued the US government for “an illegal and unconstitutional program of dragnet electronic surveillance,” in which the NSA scoops up all telephone records handled by Verizon, AT&T, and Sprint in the US. Separate suits brought by the Electronic Privacy Information Center and the American Civil Liberties Union are also in the works, but the government hasn’t responded to the allegations in court yet.

The companies at the heart of PRISM’s controversy are also acting out, but the specific details regarding their involvement in government surveillance on US citizens is still unclear. Microsoft, Google, Yahoo, and others have stepped up pressure on the government in the past month to declassify the process which compels them to hand over user data to the government. In an impassioned plea made by Microsoft on July 16th, the company’s general counsel Brad Smith said: “We believe the US constitution guarantees our freedom to share more information with the public, yet the government is stopping us.”

Finally, there’s the group of people most affected by PRISM and its sibling programs: the American public. On July 4th, “Restore the Fourth” rallies in more than 100 US cities protested the government’s surveillance programs, focusing on electronic privacy. It’s not clear if public outrage will result in reform, but thanks to the dramatic actions of a young intelligence contractor, we now at least have the opportunity to discuss what the US government has been hiding from the public in the name of national security.

COMMENTARY: In a blog post dated April 28, 2011, I told my readers about the National Security Agency (NSA), and what goes on inside that super-secret agency. For a long time, the U.S. government told Americans there was "No Such Agency," and that it would never use the NSA's intelligence gathering capabilities to spy on and gather information about Americans. However, along came the September 11, 2001 terrorist attack on New York's World Trade Center, and over 3,000 Americans died -- the worst death toll on America since the attack on the U.S. Navy fleet in Pearl Harbor on December 7, 1941 by the Japanese.

Click Image To Enlarge

A lot has happened since 9/11. Shortly after the attack on the World Trade Center, George W. Bush formed the Department of Homeland Security and signed into law the USA Patriot Act of 2001, which allowed the federal government unprecedented powers to protect Americans against terrorist attacks and gather intelligence on terrorists and "persons of interest," including unwary innocent Americans.

The act, as a response to the terrorist attacks of September 11th, significantly weakened restrictions on law enforcement agencies' gathering of intelligence within the United States; expanded the Secretary of the Treasury’s authority to regulate financial transactions, particularly those involving foreign individuals and entities; and broadened the discretion of law enforcement and immigration authorities in detaining and deporting immigrants suspected of terrorism-related acts. The act also expanded the definition of terrorism to include domestic terrorism, thus enlarging the number of activities to which the USA PATRIOT Act’s expanded law enforcement powers can be applied.

From broad concern felt among Americans from both the September 11 attacks and the 2001 anthrax attacks, Congress rushed to pass legislation to strengthen security controls. On October 23, 2001, Republican Rep. Jim Sensenbrenner introduced H.R. 3162 incorporating provisions from a previously sponsored House bill and a Senate bill also introduced earlier in the month.The next day on October 24, 2001, the Act passed in the House of Representatives by a vote of 357 to 66, with Democrats comprising the overwhelming portion of dissent. The following day, on October 25, 2001, the Act passed the U.S. Senate by 98 to 1.

Click Image To Enlarge

Opponents of the law have criticized its authorization of indefinite detentions of immigrants; the permission given law enforcement officers to search a home or business without the owner’s or the occupant’s consent or knowledge; the expanded use of National Security Letters, which allows the Federal Bureau of Investigation(FBI) to search telephone, e-mail, and financial records without a court order; and the expanded access of law enforcement agencies to business records, including library and financial records. Since its passage, several legal challenges have been brought against the act, and Federal courts have ruled that a number of provisions are unconstitutional.

Many of the act's provisions were to sunset beginning December 31, 2005, approximately 4 years after its passage. In the months preceding the sunset date, supporters of the act pushed to make its sunsetting provisions permanent, while critics sought to revise various sections to enhance civil liberty protections. In July 2005, the U.S. Senate passed a reauthorization bill with substantial changes to several sections of the act, while the House reauthorization bill kept most of the act's original language. The two bills were then reconciled in a conference committee that was criticized by Senators from both the Republican and Democratic parties for ignoring civil liberty concerns.

The bill, which removed most of the changes from the Senate version, passed Congress on March 2, 2006, and was signed into law by President George W. Bush on March 9 and 10, 2006.

The Role of Social Networks In National Security

Click Image To Enlarge

In a blog post dated January 26, 2012, I told my readers about the FBI's plans to develop a social network monitoring system to track our social media activities. Internet users already post a huge amount of personal and private information about themselves online, especially on their social network profile pages. For the Department of Homeland Security tapping into the the vast amount of information available on social networks was a no-brainer

The Central Intelligence Agency has also joined the FBI in tapping into the huge amount of data we post on social networks. In a blog post dated January 26, 2012, I told readers that Facebook was basically a front for the CIA. Can there be any doubt? If you are still skeptical, checkout this video and listen to what CIA Deputy Director Christopher Sartinsky had to say about the value of Facebook to the CIA before a Senate national security subcommittee.

Click To View Video

In January 2012, Facebook appointed Erskine Bowles, president emeritus of the University of North Carolina and a former chief of staff to President Bill Clinton, to its board of directors. Mr. Bowles replaced former Clinton Chief of Staff Daniel Pineta, when President Clinton appointed Pineta as CIA Director. Pineta later served as CIA Director under George Bush and briefly under President Barack Obama. If there is any doubt that the CIA has tightened its grip around Facebook, just look at this picture. That's right, it's President Obama reminding Facebook CEO and co-founder Mark Zuckerberg, who is the boss.

Facebook CEO and Co-Founder hopnobs with President Barack Obama at a dinner of Silicon Valley executives during his second term campaign (Click Image To Enlarge)

05/15/2013

Still in its test phase, Google Glass may be dorked to death before it gets the opportunity to take off. Here, marketing players from a range of agencies provide their assessment of Glass’s chances and some suggestions for paving the way to mainstream success.

Google’s much-hyped wearable computer, Google Glass, has been touted by the tech elite as one of the leaps forward of recent times, but those same elites may hobble mainstream adoption of the device.

While privacy concerns have blossomed (the device may be on its way to being banned at a number of locations), it may comfort those worried that we are all about to become spies for Google that the early adopters of Google Glass are helping to give it an image problem it might not recover from.

"For paraplegics and quadriplegics, Glass could be a stunningly useful way to get information and interact with it."

The futuristic-looking headset can augment our everyday reality by putting data in our field of vision as well as allowing us to take pictures, and translating the spoken word on the move. But unfortunately, it also appears to have unintended contraceptive powers, as illustrated by this Tumblr featuring members of its decidedly unhip core fanbase.

It’s all very well having wearable technology that lets you livestream yourself hang gliding. But if it has all the sex appeal of orthodontic headgear, it’s unlikely to catch on. Google’s Glass Explorer program has put Google Glass in the hands and on the heads of developers and tech pundits who Google has selected to test it and have paid $1,500. Google chief executive Larry Page has indicated that the product won’t be in stores for about another year, by which time it may be hard to separate it from its association with tech fanatics.

Arguably, success in wearable technology hinges on making people look and feel good as much as providing a functional service. Developers might be happy to fork vast sums for the privilege of being a Google Glass owner, but when the product goes to mass market, fashion, or at least some sort of coolness and covetability will be as critical as functionality.

Tech pundit Robert Scoble wrote a glowing review about the augmented reality glasses and said, "I will never live a day without them." He then showed off a picture of himself showering while wearing the glasses. Google co-founder Sergey Brin looking cool wearing a pair of Google Glass AR glasses onboard a bus (Click Image To Enlarge)

With this in mind, we asked five marketing experts: How would you position Google Glass to make sure it achieves mainstream success?

Google is embracing its influencers. Make no mistake though--they aren’t just going after the nerds. They are strategic in who they’ve invited to their Glass Explorers program, an influencer program that allows a handpicked group to use the first generation of Google Glass. Google has carefully curated a group of people who sit at the intersection of nerd and celebrity. For example, tech celebrity Soraya Darabi, among others. People like her not only bring their passion for technology but also their massive audiences (500K+ followers in the case of Soraya) into the conversation.

California Lieutenant Governor Gavin Newsom, and former mayor of San Francisco, tries the glasses on Current TV (Click Image To Enlarge)

There’s incremental innovation and there’s wow-your-pants-off innovation. Google Glass is in the latter category. We tried it on last week at Google and it was pretty amazing. Mainstream success will happen as it expands the breadth of its audience and also as its simplifies its technology. What we’ll end up with in a few years is just a tiny camera that we’ll be able to attach to any eyewear. To the broader point, wearable technology is the future. Making it as nerdy as possible at the outset is a smart strategic move to get those who will engage most with the glasses to develop their capabilities and advance them to a place of general adoption. It should be no surprise that Google has already developed a partnership with Warby Parker. The aesthetic will change over time, and this will be one of the many norms of wearable tech.

The Google Glass initial approach has focused on driving exclusivity in select communities. And they’ve nailed it. In the next stage, I’d focus on creating desire by introducing a library of plain interesting to bizarre applications of Glass. Think government, music, Hollywood, retail partnerships--maybe even an episode of Family Guy with Stewie touting Glass.

When we look at the challenge of extending Google Glasses out of nerdom, we believe that the challenge is first, one of execution and second, one of positioning and targeting.

First, in terms of execution, Google Glasses inherently plays in two worlds--fashion and technology--and they haven’t created “cool kid” lust in either area. It is neither an incredible fashion accessory that you would want to wear, nor is it a beautiful or obviously useful gadget that you would want to own.

Second, in terms of positioning and targeting, today Google Glasses is seen as a barrier to social engagement as opposed to an enabler. While it may make your world more exciting and dynamic (as the promotional video might suggest), it does not currently enhance socialization nor have they shown how the value of the glasses increases with additional users (there is currently no clear Network Effect).

Now for our gross generalization about nerds versus everyone else. Nerds actively look to create barriers to protect them from the world, mitigate social engagement, and connect through virtual worlds (thinkWorld of Warcraft). In this context, Google Glasses are the ultimate tool for nerds to add a layer of protection between them and others and potentially seal the fate of Google Glasses as something that only the geekiest of the geeks would ever want to wear (or even own).

I love Google. It gives me convenient access to a world of information and that’s something I want. I don’t love their glasses, because they don’t give me what I want. What I want is my glasses. If you’ve ever chosen a pair of glasses you’ll know how long it takes, how many opinions you seek, how many photos you’ve texted and images of celebrities you’ve looked at, be they fashion, sport or sunglasses. What I want is the Google I love, in the glasses I love. I want Google in my glasses.

Open APIs, products as platforms, and cocreation are the norm for tech companies. There is no way Apple or Android could have brought the level of innovation needed to create so many apps personalized to individual needs. Just because Google Glass is a physical product doesn’t mean Google should change the approach to creating the range of glasses needed to facilitate individual tastes.

To facilitate this, we’d build a platform allowing us to work with a range of individuals and the people who make their glasses. These people would range from well-known celebrities in fashion and sport, to everyday style leaders. The content generated across the journey from inception, build, and trial to launch would provide both broadcast content and ways to engage.

Google in Bradley Wiggins’s glasses: We follow the journey of Bradley and his glasses climaxing at the start of the Tour de France. Google in Elton John’s glasses: No one has more glasses than Elton John; he’s given us a hundred of his best to create a range of Google glasses and we’re going to find the perfect person for each of them. You get the picture. Google in P.Diddy’s glasses. Google in Sven Göran Eriksson’s glasses. Google in Victoria Beckham’s sunglasses.

If you try on anyone else’s glasses, you look like a nerd; that’s just a law of the universe. If you don’t believe me, try it. What I need is Google in my glasses.

It’s a challenge, specifically because of the stigma that was quickly attached to them. Putting aside all flaws in its physical appearance, it would be ideal to tap into how people would realistically use them day to day. Very few people are going be wearing them ALL the time, but there are times when it would be useful to have a device such as this and also have complete use of your hands. We all assume that our mobile devices have no boundaries, but there are instances when we are apprehensive about having them on our person. I think that utilizing those moments is the sweet spot for this product. It’s a more useful Go-Pro and those are wildly popular within their specific usage, which is quite broad. There’s no real need for these beyond enjoyment, and so it would be wise to illustrate the truly hands-free experiences that surround the product beyond the dorkiness we’ve experienced already. At least they’re not as cumbersome as a Segway.

Yes, white middle-aged men love Google Glass. Is it a problem? Of course not. Wearable tech has hardly fallen down Geoffrey Moore’s chasm. We’re seeing early adoption, and in tech (if we’re not counting Pinterest), white men from the Valley with disposable income tend to be first in, first out. And that didn’t stop iPads, laptops, or the mobile phone from reaching mass adoption. Yes, Robert Scoble in the shower is frightening. But take a breath. Google has already tapped Warby Parker, who I personally trust in putting things on my face, and I think Google Glass (in one iteration or another) is here to stay.

COMMENTARY:

What Tech Guru's Are Saying About Google Glass

I am discounting by about 95% the positive comments made by most of the above technology pundits, expecially some of the above VC's in favor of what other technology pundits are saying:

Marcus Wohlsen, a tech reporter for Wired, on May 2, 2013, gave some hints that Google Glass could end in failure by making these comparisons:

“The Segway. The Bluetooth headset. The pocket protector.”

Rebecca Greenfield of The Atlantic, called the secret photo-taking application a “privacy nightmare,” and she also said:

Privacy and security have become major concerns and as the list of concerned protesters continues to grow, we began to wonder: Where will we be most likely to see this Glass resistance moving forward? This is a short list of businesses and places who will ban Google Glass:

Movie theaters and concert venues - It's interesting to consider what Glass could do for film piracy and that annoying guy in front of you who waved his phone snapping photos through an entire two-hours concert. But these are two of the most obvious examples of places that traditionally prohibit cameras.

Public schools - Or nurseries, or playgrounds. Really, anywhere with an influx of children is going to be a potential hotbed of legal headaches.

Behind the wheel - The West Virginia legislators' attempt to ban Glass while driving will inevitably gain favor within other states, which will likely include many of the country's 39 states and Washington, D.C., where texting while driving is prohibited.

Hospitals - Hospitals house boatloads of some of our most personal data, including medical records and insurance information. A stray paper or tilted clipboard could easily find its way into a Glass photo.

Banks and ATMs - Similar to the hospital example, it's not unfathomable to imagine a Glass-clad someone hovering a little too close to your left shoulder to peep a glance at (not to mention a photo of) your credit card.

Dressing rooms, locker rooms, and other rooms with people who are potentially naked - Think everywhere from department stores to your gym to strip clubs.

I might also add to the above list:

Law enforcement - The police will absolutely hate Google Glass. They don't want you recording their every move and what they say, because this could be used against them in court.

Courts rooms - Court rooms often ban photographers from their court rooms, especially high-profile and controversial cases. This is often necessary in order to protect the identity of the jurors and individuals making testimony.

Military bases - Any military personnel on military bases who enter or work in highly classified and secured areas will definitely be banned from wearing Google Glass.

Schools and colleges - Google Glass will definitely be banned from the classroom. Instructors will be weary of students who might use Google Glass to teach on tests.

On the other hand, I can definitely see immigration inspectors, airline security, law enforcement and even retailing establishments benefiting from Google Glass, in helping them identify criminals, security risks, people of interest and shoplifters before they commit crimes. Companies that want to protect their valuable intellectual property as a matter of practice will ban Google Glass.

In my opinion, any technology that raises the high level of privacy and security concerns and could lead to consumer litigation potentially in the billions, has a huge PR image and this has the ability to permanently damage or destroy a brand. This is what I see happening with Google Glass. If Google wants to market Google Glass to the masses, they will have to severely limit or block its use in certain situations.

Google needs to be careful that it does not damage its own brand reputation as the company whose motto is: "Don't Be Evil." Google Glass has the potential to turn Google into the feared "Big Brother," that Steve Jobs warned us about when he tried to portray IBM as "Big Brother" in the famous TV commercial. The company has to be very careful how they launch Google Glass. The company has a social responsibility to uphold (its motto) and it should not take us for granted. The small cadre of tech geeks and very early adopters who now love and applaud Google Glass as the next big thing, may later learn to hate if they are not too careful.

I keep hearing that Google Glass represents the next evolution of the social network. Bringing the social network experience into the real world and sharing what we see and do with others. Is this what Google (and Facebook) really wants? God help us if this is where social networks are headed. I don't want that kind of "social media experience" biting me in the butt, and I am sure you don't either. Left to its own accord, without any controls, I believe that Google Glass crosses a line in the sand where our privacy is not only violated, but completely destroyed. We lose our individuality as human beings, and we become an open book to anyone and everyone.

For those who wish they could better remember names and faces, a new demo app for Google Glass gives you notes on how you know each person.

Although the concept seems perfect for party or networking events, the app — called MedRef for Glass — was actually designed for hospital employees. By using facial recognition technology, staffers wearing Google's high-tech specs can pull up patient folders with photo, voice and text notes.

For example, a doctor might want to record that a certain patient likes to be rolled over on one side of their body or is allergic to nuts. And because the data is shareable with Google Glass, other nurses and physicians can have immediate access to this information.

Here's how it works: MedRec adds timeline cards and sharing contacts via Google Glass. By saying a patient's name or taking a picture of their face, the device will bring up their records.

Lance Nanek, a computer programmer who worked to develop the app says.

"Hospitals are full of very busy people — often with their hands full — who work with a lot of information. Google Glass and making [data] wearable is especially being looked forward to there."

For a full look at how the app works, check out the video above.

Do you think Google Glass and its apps will revolutionize how we use technology across various fields, including the medical world? Let us know in the comments.

COMMENTARY:So far Google Glass is not illegal, but some businesses have began posting "Google Glass Is Banned On These Premises" signs. Despite a front page story appearing in the May 7, 2013 issue of the New York Times suggesting that Google is already facing a bunch of legal pushback over its face computer of the future, there are no laws on the books that make Google Glass illegal -- Yet.

Click Image To Enlarge

A Los Angeles privacy lawyer tells the New York Times's David Streitfeld.

"This is just the beginning. Google Glass is going to cause quite a brawl."

It's unclear how true that is, of course, because there hasn't been much actual courtroom brawling so far — mostly just Internet whining, really.

The New York Times cites a proposed bill from West Virginia statehouse politicians who "were not joking at all" about a ban on Glassing-while-driving. Except the bill seriously hasn't made it to the house floor yet. And while the New York Times cites the bill's sponsor in saying he's "likely" to reintroduce the legislation, well, Rep. Gary Howell has also said that he will introduce a study resolution to see how dangerous Google Glass really is. You know, in the meantime, and in the reality outside front-page privacy freak-out trend stories:

"If we do that, I would like to invite Google to provide a demonstration and explain if they will have some type of feature that will turn off everything."

Howell has said, in addition suggesting that he's open to other alternatives outside of the anti-Google Glass law.

But even if Howell takes his law back to the West Virginia state legislature and it passes, that hardly makes Google's new device illegal. After all, according to the New York Times,

"This is the most anticipated piece of electronic wizardry since the iPad and iPhone we're talking about here."

And by the logic of the New York Times's scare tactics, cell phones would be considered illegal in all these states that ban use while driving. Even the group Stop the Cyborgs, which has launched an anti-Glass campaign, doesn't want to outright ban the devices.

"We don't want a total ban but do we want people to limit it's use."

the group insists (in bold), in the About section of its website. While other, logical places — like strip clubs, or casinos — have banned Google Glass, people don't necessarily need laws or formal prohibitions to tell them how to properly regulate their usage of the world's foremost walking computer. Already a whole bunch of people have written about their inclination to have specific etiquette while using Google Glass.

However, even Google admits that its much discuss hardware is still in beta — and that the company is open to changes to better suit our apparently myriad privacy fears. That's basically all the Stop the Cyborgs of the world want, anyway. The Cyborgs group has three main points suggesting ways in which Google can build in enough privacy to placate the interests of privacy hawks the tech world over:

They will never allow any face recognition system or any app which automatically identifies people to work on Google Glass or on any server system connected to Glass.

They will implement a do not track system which allows people to opt out of being tracked or having information captured about them by Glass. This system should not require the person to identify themselves.

That all information gathered by Glass will remain the property of the owner or subject and will be encrypted so that it is impossible for it to be data-mined, made available to security services or used for commercial purposes.

Google chief Eric Schmidt sounds equally as open to those kind of changes himself. Schmidt said in response to a question about the scary future of data-tracking that Google will help create.

"I think you're describing a world of tracking which I think is highly unlikely to occur, because people will be upset about it in the same way you are."

He continues:

"Governments won't allow it, and it'll be bad business. And ultimately, in a competitive market, companies want the consumers to be happy. So it's true tracking in this context...you're taking a much broader view of the word ['tracking'] than any I would use. A situation where you go to people and say, 'Oh, here's our phone, and we're going to track you to death,' people are not going to buy that phone. It's just a bad business model."

I am in total agreement with The Cyborgs group recommendations to limit how Google Glass can be used. We certainly do not want automobile drivers to know the identity of random people by glancing at their vehicle plates. Individuals have a right to their privacy and preventing the disclosure of their identity to the masses. Google Glass' face recognition technology opens a can of worms that will become a legal nightmare for Google. I understand that Google has over 100 attorneys on their staff. They better get them ready for the onslaught of lawsuits that are likely to come if face recognition and private information about individuals is disclosed without permission.

Courtesy of an article dated May 13, 2013 appearing in Mashable and an article dated May 7, 2013 appearing in The Atlantic Wire

05/06/2013

One of the two proposed replacements for the U.S. military’s iconic Bradley Fighting Vehicle is a gas-electric hybrid that can go into fully electric mode so it can surprise enemies silently at night.

The old M2 Bradley Fighting Vehicle has served in the Kuwait, Iraq and Afghanistan Wars (Click Image To Enlarge)

In just a few years, the United States Army is expected to retire their iconic Bradley troop carrier. The Bradley’s replacement, the proposed GCV Infantry Fighting Vehicle, is a massive, highly modifiable ground combat vehicle that grew out of years of military and defense contractor studies. There’s also a very good chance it could be a gas-electric hybrid.

The Pentagon has a keen interest in hybrid gas-electric vehicles, solar power, and other clean energy sources (Click Image To Enlarge)

Building the Army’s next-gen GVC Fighting Infantry Vehicle with a hybrid gas and electric system is a matter of saving valuable budget dollars during an era of fiscal belt-tightening (Click Image To Enlarge)

The Pentagon has a keen interest in hybrid gas-electric vehicles, solar power, and other clean energy sources. For the Defense Department, building the Army’s next-generation fighting vehicle with a hybrid gas and electric system isn’t a matter of saving the world; it’s a matter of saving valuable budget dollars during an era of fiscal belt-tightening.

The GVC Fighting Infantry Vehicle can also switch to pure electric mode for short periods of time. This would eliminate significant heat traces from the battlefield and lets the tank operate much more quietly at night (Click Image To Enlarge)

When the next generation of GCVs begin construction--the exact date depends on an elaborate political horse-trading process between Congress, the Pentagon, and defense contractors--they will include parts from a variety of vendors. One of the proposals the Pentagon is considering uses a hybrid propulsion system. BAE Systems, which is partnering with several other firms to create the proposed hybrid system, is adapting civilian hybrid power systems from buses and automobiles to the tank. BAE has worked on various other hybrid systems in the past.

The GCV Fighting Infantry Vehicle will have a 40-year lifespan and can effectively transport troops to the battlefield while providing support fire (Click Image To Enlarge)

The GCV Fighting Infantry Vehicle's hybrid electric drive also means the tank burns half as much energy while idling (Click Image To Enlarge)

BAE Systems’ Mark Signorelli told Co.Exist.

“The change from switching over to hybrid GCVs is like when the Air Force purchased their first jet fighters.”

If BAE’s proposal is adopted by the military, the Defense Department will save approximately 20% in fuel costs compared to an alternate GCV vehicle with traditional propulsion. The electric motor will also provide faster acceleration than Bradleys, and the tanks can switch to pure electric mode for short periods of time. This would eliminate significant heat traces from the battlefield and lets the tank operate much more quietly at night.

The GVC Fighting Infantry Vehicle works as a tank once a few basic accessories are added (Click Image To Enlarge)

Because of the on-board electricity source, the GVC Fighting Infantry Vehicle can also be equipped with electric armor, jammers, or the experimental energy weapons that the Army is currently researching (Click Image To Enlarge)

Signorelli said.

“There are several advantages in using a hybrid propulsion system for a military vehicle over a conventional engine. A hybrid electric drive system would use up to 20% less fuel, significantly reducing fuel costs and the number of vulnerable convoys for resupply. […] There are also 40% fewer moving parts with higher reliability, requiring less maintenance and decreasing vehicle lifetime cost. Vehicle acceleration, handling and dash speed are improved even over fuel hungry turbine systems. Finally, the system’s ability to provide large amounts of electrical power accommodates the integration of future communications and weapons technology for the next 30 to 40 years.”

According to BAE, the team behind the vehicle will include several other defense contractors. Northrop Grumman, Qinetiq, MTU,Saft, L3, and Tognum are all contributing parts to the proposed project. If the military adopts the proposed hybrid vehicle--there is a competing proposal with non-hybrid propulsion, they could roll onto the battlefield in the next decade. BAE representatives claim that the first vehicle could be delivered in 2020 and fielded in 2022 if the Defense Department chooses their proposal.

GCV vs Bradley Fighting Vehicle Dimensions (Click Image To Enlarge)

BAE claims the GCVs will have a 40-year lifespan and can effectively transport troops to the battlefield while providing support fire. Once in action, the GCVs will be powered by a hybrid electric drive that generates almost 1,100 kilowatts of electricity. The hybrid electric drive also means the tank burns half as much energy while idling; this is a significant cost savings for the Pentagon, and can also let troops charge their electronics off the vehicle’s batteries.

Signorelli also stressed the GCV’s “growth and modularity”--the vehicle works as a tank once a few basic accessories are added; the vehicle can also be augmented with accessories including electric armor, jammers, and experimental energy weapons thanks to the in-vehicle electric power source. Some of these experimental energy weapons are being researched by the military for use in the medium future.

However, there has been criticism of BAE’s proposal for a hybrid fighting vehicle. All of BAE’s innovation comes at a price--the hybrid vehicle is significantly heavier than one with a conventional power system. The Congressional Budget Office (CBO) released a critical report in March, which claims both BAE’s proposal and rival General Dynamics proposal would waste government funds. Instead, the CBO recommended purchasing a German troop carrier called the Puma (Developed for the German Army) or a similar Israeli product.

The CBO was especially worried about the size of BAE’s hybrid GCV. With armor, the finished vehicle will weigh 70 to 84 tons, AOL Defense’s Sydney J. Freedberg Jr. reports. There is speculation that the vehicle’s large size would put it at a disadvantage when used in dense urban environments abroad.

Signorelli says that there is a need for increased capacity in the next generation of military vehicles. In the meantime, despite the military’s ambivalence about moving on from the Bradley, they will face an unavoidable choice in the future. As it stands right now, there are good odds that choice might just be a hybrid--and Prius owners will get new bragging rights.

COMMENTARY: I like the idea of a hybrid armored infantry vehicle like the GCV Infantry Fighting Vehicle, because of the 20% savings in fuel costs, armaments and 40-year life span, but the weight of a finished GCV, at 70 to 84 tons, is just too much when you need speed and manuverability in the battlefield.

I am a patriotic American, but the PUMA Armored Infantry Fighting Vehicle is an excellent vehicle and it's in production now. What swooned me is what BreakingDefense.com reported in an article dated April 2, 2013 about what the Congressional Budget Office (CBO) had to say about the GCV and PUMA.

"The Army’s proposed Ground Combat Vehicle would offer less combat power, at a higher cost, than buying the German-made Puma already in production or even just upgrading the Army’s existing M2 Bradley, according to the Congressional Budget Office.CBO issued a report today assessing different alternatives to upgrade Army heavy brigades‘ infantry fighting vehicles (IFVs), tank-like war machines with tracks and turrets designed to carry troops into combat."

"The non-partisan CBO, Capitol Hill’s in-house thinktank, has slammed the Ground Combat Vehicle program before, but never this hard. The office’s analysts took the Army’s own criteria and created a grading system that scored different combat vehicles for effectiveness. Using a scoring scheme that prioritized protection above all, followed by firepower, mobility, and passenger capacity, in that order, the CBO rated the Puma highest, followed by a notional upgrade to the Bradley, followed in distant third place by the GCV. (The Israeli-built Namer came in fourth). Even under an alternative grading scheme that weighted all four criteria equally — putting much more emphasis on the capacity to carry troops — the 6-passenger Puma still edged out the 9-passenger GCV, largely because of its superior firepower."

"Add in the cost and risk of developing a new vehicle, and the analysis swings even farther in favor of the Puma. Since the Germans already have the Puma in production — the vehicle entered Bundeswehr service in 2011 — there’s no untested technology to cause problems. And even after buying 25 percent more Pumas to make up for its smaller carrying capacity, the Army would spend half as much as to develop, test, and build the GCV, according to CBO’s estimate: $14.5 billion for 2,048 Pumas as opposed to $28.8 billion for 1,748 GCVs."

"[Updated: But, as one alert reader pointed out, CBO isn't counting the cost to add three more vehicle crewmen to every mechanized infantry platoon to drive the extra Pumas -- at least 900 personnel Army-wide -- nor the extra maintenance personnel to support five vehicles per platoon instead of four, nor the ripple effects of rejiggering facilities built to accommodate four vehicles to take five instead.]"

"There is room to argue with CBO’s scoring system. To start with, since the GCV does not yet exist, CBO grades the vehicle based on the Army’s 2010 “Design Concept After Trades”; the actual GCV might be better or worse. For example, CBO assumes the GCV will have only a 25 millimeter cannon, rather than the Puma’s 30 mm, but Army officials I spoke to were still hoping for the larger caliber."

"Indeed, in the CBO’s scoring overall, the Puma’s big advantage over the other candidates is its firepower. (CBO scored Puma as slightly better protected than GCV but slightly less mobile). In particular, Puma scored high for its ability to kill tanks and other armored vehicles."

"But the Army deliberately chose not to install an anti-tank missile launcher on the GCV: The US military already has far more ways to destroy enemy tanks — from the M1 Abrams’s 120 millimeter gun to the A-10′s 30 mm Gatling, from the shoulder-launched Javelin missile to the air-launched Hellfire — than there are enemy tanks left to destroy. In the post-Cold War world, the nightmare scenario isn’t a long-range battle with hordes of Soviet tanks on the plains of Germany, it’s a close-quarters slugfest with irregular fighters hiding in crowded cities, where anti-tank missiles are largely irrelevant. So the Army decided it could better spend its money on other things — although the GCV is being designed to be upgraded with a missile launcher if the Army changes its mind."

"The Puma also mounts its massive firepower in an unmanned turret, remotely controlled from inside the vehicle. The Army considered such a design for GCV but ultimately decided it needed the gunner and vehicle commander riding inside the turret, as they do in the current Bradley and M1, able to look through the gunsights directly and clear jammed weapons if the automatic systems break down. A manned turret weighs and costs more than an unmanned one."

"The Army has also insisted, over and over, that it needs the capability to carry nine foot soldiers in addition to the crew: Bradley can manage four to six — seven if they squeeze — and Puma can take six. But more passengers means a bigger vehicle, which means more cost, especially if you have to armor the whole thing to a high standard against everything from anti-tank rockets hitting the top to roadside bombs hitting from below. The Army still thinks it’s worth the price to deliver a full nine-man squad to the same place at the same time, instead of scattering teams over multiple vehicles; but at the prices CBO is quoting, just buying a larger number of Pumas to carry the same number of troops looks awfully attractive."

"One major omission: CBO did not assign a numerical score to one of the Army’s most important considerations, the alternative vehicles’ ability to power new digital radios, command-and-control computers, and other military network hardware. The report does say 'the Puma’s communications and networking capability would be less than that of the GCV or the upgraded Bradley IFV.'"

"On the other hand, there is at least one other factor CBO didn’t include in its scoring that actually would have hurt GCV more to include. The Ground Combat Vehicle, fully armored, would weigh 65 tons, says CBO. (CBO earlier estimated 64 to 70 tons). The Puma, with all its add-on armor, would weigh 47. Strategically, that lower weight, and the reduced gas consumption that comes with it, would make Puma much easier to deploy abroad and then keep supplied with fuel — crucial considerations as the Army pulls out of Afghanistan and tries to revive its capability to deploy rapidly to distant crises."

Clearly, the CBO did not think very kindly of the GCV, ranking it third behind the PUMA and upgraded version of the Bradley Fighting Vehicle. For me the higher weight of the GCV, loss of battlefield speed and manuverability and higher costs are the real bugaboo.

The German-made Puma provides full protection against mines and anti-tank weapons, at a level previously unavailable to similar systems (such as the Marder it will replacing in service). To maintain high protection levels and air mobility with the future Airbus A-400M European transport, Puma will be produced in a basic "Level A" protection featuring a total gross weight of 31.45 tons. Additional armor protection called "Level C" could be applied after the vehicles are deployed at their destination area, providing increased protection against shaped charge threats, medium caliber guns and heavier mines. Further protection is applied to the vehicle's roof, protecting from top attacks by AP bomblets.

I like the German-made PUMA because of its lower cost, overall design, armor, horsepower, light-weight, manuverability and armaments. Here are some of the key Puma specifications:

The turret is also installed with a gunner's thermal sight, a commander's independent panoramic sight, 400 ready to fire rounds of ammunition and smoke dischargers.

The PUMA is clearly a nimble, fast, manuverable and well-armed armored fighting vehicle, and the GCV, when fully armored and armed will outweigh today's Abrams A-1 tank. Does this make any sense?

In several past blog posts, I warned readers about the U.S. Defense Department's history of budget cost overruns when it comes to military hardware. We are quickly approaching a Defense Department budget of $1 trillion dollars per year.